All sugar output now for local use

A vendor places sugar in plastic bags for sale. — PHILIPPINE STAR/ EDD GUMBAN

By Luisa Maria Jacinta C. Jocson, Reporter

THE SUGAR Regulatory Administration (SRA) on Tuesday issued an order allocating all raw sugar output in the coming crop year for the domestic market.

Under Sugar Order (SO) No. 1, 100% of sugar production will be classified as “B,” which means it is designated as domestic sugar supply.

The SRA said total raw sugar production in the 2022-2023 crop year is estimated at 1.88 million metric tons (MT), while projected demand is seen hitting 2.03 million MT or a shortfall of 155,000 tons.

The crop year began on Sept. 1, 2022 and ends on Aug. 31, 2023.

The SRA said it will continuously assess the crop year’s production and demand and make any necessary adjustments to allocation.

“On the basis of such assessment, SRA may from time to time adjust the percentage allocation or distribution to other classes of sugar in accordance with its power and function to establish domestic, export and reserve allocation,” it added.

The order means the Philippines will not participate in the export of any raw sugar to the United States as part of an annual sugar quota allocation.

Local prices of sugar have spiked in recent months amid a supply shortage.

As of Sept. 2, the average retail price of refined sugar in wet markets rose to P97.43 per kilogram from P52.71 in the same period a year ago. A kilo of raw sugar is now priced at P72.43 from P45.29 a year ago.

The order is seen to alleviate the ongoing sugar shortage as it prioritizes the needs of the local market, according to industry stakeholders.

“We have been pushing for an all ‘B’ allocation to ensure that local demands are met and must be prioritized. This was done before and we can do it again. I am glad that the new (sugar) board, along with Mr. Marcos see the need to give importance to domestic needs before exporting,” United Sugar Producers Federation President Manuel R. Lamata said in a Viber message.

Samahang Industriya ng Agrikultura Executive Director Jayson H. Cainglet said that the government should always allocate production for domestic use when there is a shortage.

“Why allocate for exports, when there is a supposed claim of production shortage? Then import what is only needed by specific end-users or sectors. This goes for all agricultural commodities. We laud Mr. Marcos (for) safeguarding the interest of the local agriculture sector and the objective of boosting our food security,” he said in a Viber message. 

Philippine Chamber of Agriculture and Food, Inc. President Danilo V. Fausto said the sugar order would also ensure that the needs of industrial users would also be taken into consideration.

“As to the sugar needs of industrial users, the said order will address the demand through periodic assessment, review and adjustment as indicated,” he said in a Viber message.

“In general, I think SO No. 1 provided that the periodic assessment will be done in short intervals in order to make sure that the industrial users will not be left behind,” he added.

Last year, the SRA had allocated all sugar production for crop year 2021-2022 for domestic consumption.

The country’s raw sugar output in the previous crop year, which ended on Aug. 31, was estimated at around 1.8 million tons, down 16% from the previous season because of crop damage from a typhoon and unfavorable weather.

Food shortages in the Philippines, which are being addressed through importation, have become a major concern for Marcos, who has vowed to turn the long-neglected agricultural sector into an economic growth engine.

The Philippines is the world’s second-biggest buyer of rice and for years has also been importing most of its salt requirements and some volumes of fish.

African Swine Fever outbreaks have also reduced the local hog population, prompting the government to raise pork imports.

Largely driven by higher food prices, Philippine inflation averaged 4.9% in January-August, exceeding the central bank’s 2%-4% target band this year and prompting aggressive monetary policy tightening. — with Reuters